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KLARNA TO EXPAND PAYMENTS SOLUTION TO U.S.

STOCKHOLM, September 19,
2014 – Klarna, a
Swedish e-commerce company focused on simplifying buying, today announced plans
to expand to the U.S. market in early 2015. A well-known player in Europe for
close to a decade, Klarna delivers a much needed payment solution for
disenchanted online U.S. retailers and frustrated consumers alike.

To drive U.S. expansion,
Klarna has recruited Brian Billingsley from Alliance Data as Chief
Executive Officer of North America; former Bill Me Later and PayPal director Carol
Hargrave as Chief Marketing Officer; and former Apple payments counsel, Jin
Han, as Chief Legal Counsel for North America. Earlier U.S. recruitments
include Chief Credit Officer Matthew Risley from Treliant Risk Advisors
and Chief Financial Officer John Keatley from Green Dot Corporation.

“U.S. online retailers
have grown disillusioned with existing payment solutions as the poor user
experience has led to abandoned checkouts and lost sales for years. It’s common
that 90 percent or more of consumers entering a mobile checkout do not complete
their purchases”, said Brian Billingsley, CEO North America of Klarna. “Klarna
has a very simple value proposition: We increase conversion at checkout and
assume all the risk. Klarna doesn't win if the retailer doesn't win.”

“We founded Klarna with
the vision to simplify buying online. By putting the consumer experience first,
we can make the mobile a platform for shopping, and not just browsing”, said
Sebastian Siemiatkowski, CEO and co-founder of Klarna. “Across Europe,
retailers who use Klarna have seen increased mobile conversion from a few
percentages to close to fifty percent on average. That translates directly into
more sales for retailers. Now Klarna is extending that opportunity to the
United States.”

At its core, Klarna
increases simplicity and safety for consumers by separating buying from paying.
A consumer making an online purchase enters only top-of-mind information like
an email address and zip code to buy an item. From there, Klarna assumes all
the risk from the purchase transaction, pays the retailer immediately, and
collects the amount due from the consumer within 14 days. Consumers can settle
the transaction with any preferred payment method. The process is made possible
by Klarna’s proprietary risk assessment protocol. By using advanced data analytics
and modeling, Klarna gives approved consumers a seamless buying experience and
uses incremental identification to deter potential fraudsters.

“Klarna’s ‘buy now, pay
later’ approach means consumers check out quickly and don’t have to pay until
they’ve got the goods in their hands”, said Brian Billingsley, Klarna CEO of
North America. “For retailers, this means more successful sales and a guarantee
that they will get paid immediately, whether or not the consumer reimburses
Klarna.”

Klarna has a proven track
record in Europe to fuel its success in the United States, including more than
25 million users and 45,000 retailers including ASOS, Spotify and Zara. The
company expects revenues of more than $300 million (approximately €250 million)
in 2014 and is used for more than 200,000 transactions per day. It is
forecasted to help retailers sell more than $9 billion (more than €7 billion)
worth of goods this year.

The Klarna Checkout
solution works across all platforms but increases conversion particularly on
mobile. The average checkout conversion on mobile is between one and ten per
cent, depending on industry and type of goods. For Klarna Checkout the
equivalent conversion is about fifty percent.

“The success Klarna has
seen in Europe gives me confidence as we enter the U.S. market”, said
Billingsley. “I believe our commitment to delivering a streamlined and simple
way to buy will become the standard for the industry to follow.”

Klarna was founded in Stockholm in 2005 with the idea of simplifying buying. We do this by letting the consumer receive the goods first and pay afterwards, while we assume the credit and fraud risks for the merchants. Today, Klarna is one of Europe’s fastest growing companies.

In 2014 we joined forces with SOFORT and formed Klarna Group, the leading European payment provider. Klarna Group has more than 1200 employees and is active on 18 markets. We serve 35 million consumers and work with 50 000 merchants. Our goal is to become the world’s favorite way to buy.